Forecasting the supply chain is not a simple task. After all, who saw the pandemic come, or the labor shortages that came out of it? However, precisely because supply chains are so unpredictable, businesses across sectors are turning to technology for help. Technologies such as digital twins.

A digital twin is a dynamic software model of a physical item or system that relies on sensor data to understand its state, respond to changes, improve operations, and add value.

With the advent of the Internet of Things, big data and predictive analytics, the power of digital twins has become immense.

In the context of supply chains, a digital twin is a virtual copy, involving potentially thousands of assets, warehouses, logistics and inventory positions. It provides a clear picture of the risks faced by complex and interconnected supply chains. This allows supply chains to be agile because risk is identified early and disruption is minimized, or perhaps even avoided altogether.

Dual digital script planning brings versatility

One thing the pandemic has taught businesses is how important it is for them to have agile supply chains. A feature of twinning technology that brings versatility is its ability to allow scenario planning, so if disaster strikes, then decisions are based on business needs, not on which harm reduction option is worst – which is still. the way things are in many businesses.

Scenario planning can help mitigate risk in many ways. For example, by allowing a company to play a future tariff change that would put its business model under extreme pressure, a strategic twin can help it prepare for such an eventuality and make long-term end-to-end decisions. . supply chain.

Exploring supply chain support opportunities is another area in which digital twins can help. For example, a company could simulate what would happen if it transferred key elements of its supply chain from within the M25 to deeper Kent, rural Suffolk or remote Norfolk.

Scenarios of cyber attacks more vital than ever

But there is one area in which scenario planning is becoming increasingly important for businesses: cyber attacks. The Supply Chain Management Association (ASCM) has made a standard tool available to its members. With the launch of the vehicle, ASCM found that cyber-attacks were cited as a “dominant threat” by 46 percent of its members and that cyber-attacks are the main concern in the consumer electronics sector.

She offered JBS Foods as an example. The Brazil-based company is one of the largest international meat processors in the world and in May this year it was forced to pay the equivalent of 7. 7.8 million as a ransom to end a major cyber attack that temporarily shut down a number of its operations. in Australia, Canada and the US. The payment is said to have been made using Bitcoin after the plants were back online. JBS said at the time that it was necessary to pay to protect its customers.

ASCM also found that ransomware attacks had increased 400 percent from pre-pandemic levels and that there were 143 incidents and nearly 1.1 million records broken worldwide in April 2021 alone. cost organizations $ 6 trillion globally.

Energy is a sector that is more prone than most to cyber attacks. Cyber ​​security firm Hornetsecurity reports that 16 percent of known cyber attacks are against energy companies.

The truth of this is confirmed by the global consulting firm Wood, which specializes in engineering throughout the energy and built environment. In an article published in August 2021, Wood gives cases of cyber power attacks and how digital twin technology is the best way to thwart such attacks.

Cybercriminals are targeting the energy sector

Among the cyber energy attacks listed by Wood were:

  • Six-day closure of the colonial pipeline. One of the nation’s largest pipelines – transporting gasoline and jet fuel from Texas to New York – was forced to shut down after being hit by ransomware. It carries 45 percent of the East Coast’s fuel supplies, and the closure sparked panic buying and congestion that has plagued gas stations in the southeastern United States. This is the most destructive cyber energy attack in history.
  • Attack on the Ukrainian electrical facility. Operators noticed that their control system computers were being manipulated, but not in time to prevent power outages affecting 230,000 people
  • Florida Oldsmar Water Treatment Attack. One operator noticed that the screen of his control system was changing without his help. Fortunately, he was able to mitigate the impact on the control system.

Digital twins mimic the flight simulator approach

Wood says twin digital technology can help protect energy facilities by providing training based on cyber attack simulations. Such systems can be used to simulate security breaches and also to improve responses to such attacks. Wood says that among the simulations are cyber attacks based on remote access trojans, denial of service trojans and CryptoLocker ransomware attacks. This approach, Wood says, mimics the use of flight simulators by the aerospace industry that help pilots solve problems in virtual environments in real time.

McKinsey’s associate partner Sebastian Reiter believes the Covid-19 pandemic has exposed vulnerabilities “across the global value chain” and has pushed companies to prioritize risk management and operational resilience against cyber attacks and other threats to supply chains. He agrees that technology has a critical role to play in this, but it also sounds a cautious note, warning that the digital transformation of supply chains itself carries a degree of risk.

“Companies are increasingly incorporating the Internet of Things into their factories,” he says. “This and other devices, including the use of digital twins, can make them more vulnerable to a wide variety of cyber attacks.”

But he agrees that, ultimately, increasingly sophisticated artificial intelligence (AI) technologies – such as digital supply chain simulations, advanced analytics-based forecasting, and supply chain network optimization tools – will help companies “improve the efficiency of their value chain. balance sheet.” But he emphasizes that the key is to use such technology “when and where it matters, in order to mitigate risks and builds operational resilience “.

Reiter continued: “The next generation of end-to-end planning processes is fundamentally different. AI can help balance efficiency and resilience by including uncertainty in realistic reality simulations to evaluate scenarios and identify risks, and finding optimal plans for different time horizons. He says AI can “recommend operational decisions that balance cost with revenue” and he agrees that providing digital twins with real-time visibility ultimately helps businesses “better anticipate and respond to chain breaks”. supply “.